How blockchain can impact the HR function
With technologies like Artificial intelligence (AI), Big Data Analytics, IoT, and cloud computing, we are headed for a technological revolution. Amidst all technologies, blockchain will likely advance ahead. Blockchain is the backbone of cryptocurrencies and has the ability to protect data, unlike social media websites. Blockchain doesn't just allow data ownership but also gives you a secure gateway through which information can be exchanged. In the words of Tyler Winklevoss, Co-creator of Facebook, “We have elected to put our money and faith in a mathematical framework that is free of politics and human error.”
Blockchain in Recruitment
Even though the HR landscape has undergone massive transformations in the last two decades, the adoption of blockchain has been slow. We have witnessed the process of verification, resume screening, interviews, and onboarding growing immensely. The conventional way of recruiting was going through an agency, which has changed with the introduction of blockchain. It has enabled direct interaction between the candidate and the recruiter. The elimination of middleman has streamlined the flow of data as well as the cost involved. In a study, it states blockchain technology is capable of simplifying the process of identifying potential candidates by providing a database of people with experience and skills after validating them accurately.
Blockchain has surely impacted the HR domain, but the key areas where it can be integrated are:
Background Verification: The tedious process candidates go through for the verification process for an organization is taxing. Integrating blockchain in the process will help secure information like employment history, qualifications, identity proofs, salary information, etc. Once the data is verified and added to the ledger, it can't be altered; however, one can add more records. The information is secure and uncompromised and can't be manipulated with. Candidates can make their profile and share the relevant information with the employer of their choice without involving a third-party.
Easy Onboarding: After verifying the candidate information using blockchain tech like address proof, previous employment records, and other credentials, the recruiter can examine the candidate without the time-consuming documentation process, which makes the process on hiring clients easier.
Payroll: The payroll process for international employees becomes more comfortable with blockchain. The money transferring process to another country can be a demanding process, and most organizations involve a middleman for the same. Blockchain cuts the middleman and makes the process easier. For example, a company called Bitwage uses bitcoins for money transferring purposes. The employee gets paid in local currency without any other party involved. All this can be done using blockchain tech. The organization saves money in the process as well by cutting down the payment of the third party.
New Pattern of Working and Learning
PwC, in their study Millennials at work, talks intensively about the new age work culture. In this modern age, people tend to take a break from work, pursue different career options, and take jobs that are supported by technology. The study says 71% of millennials are enthusiastic about working overseas and want such assignments.
Paying these employees overseas becomes a hustle for the organization as mentioned above. The blockchain helps to cut the middleman and hence becomes cost-efficient. Blockchain technology allows the organization to pay in bitcoins. The employee working overseas receives the pay in the international currency and the organization reduces the cost they pay another institution for the smooth transaction.
We are aware of how important continuous learning is for employees of any organization. People opt for informal ways to keep themselves updated, like online certification, digital credentials, badges, etc. All of these can be tracked, and updated in employees resume with blockchain.
Blockchain can make smart contracts between the employee and employer happen without the involvement of third-party. With a smart contract, the codes determine the distribution of money. Which results in no delays or fraud. Several lawyers are trying to create smart contracts to automate the distribution of the capital process. If the concept becomes a norm while hiring, it will change the entire payroll landscape.
Several firms around the globe are thinking of adopting the concept and blockchain technology. For example, Walmart uses the blockchain tech to track livestock that moves through the supply chain from China.
Blockchain can bring in a new perspective for the HR domain. An organization can stay updated by developing a basic understanding of the tech. Understanding the issues in the organization, they can look for a vendor who specializes in HR issues and the HR blockchain market. In a survey conducted with 600 executives, 84% of people reported that their organization practiced some blockchain technology. Organizations have adopted blockchain technology to gain a competitive advantage over other organizations.
As one would have gathered, a well-designed blockchain cuts out the intermediaries, cuts down the costs, and helps the organization be faster with better reach. Moreover, in business processes, this technology offers traceability and transparency, since it gives us the freedom to view the holdings and transactions of each public address which helps the business grow. It is expected that by the year 2030, a certain percentage of global economic infrastructure would be running with systems that support blockchain technology.